14. Disability income insurance provisions and costs Selecting a Disablity Income Insurance Plan Youtve dected to obtath disbbtity thcoine trasurance and have done your homework to learn about the features of different plans. Double-check your knowledge to help you select the plan that's right for you by answering the following questions. You love your job and if you become disabled don't want to do any other job. Yet, you'l need an income. Even though it will cost you more, you will buy a poticy with a definition of disability of The cott is more because the insurer has flexibility when determining if you're eligible for benents. When you shopped for a desability income insurance plan, the likelihood of finding a plan that would pay 95% of your gross income was You found that the usual range of gross pay that's covered with disability income insurance is because the percentages could encourage seme people to In many cases, these peopie could then coliect than their pay from their jobs. Limiting the amount of disability benehts to these percentapes usually covers necessities: adequately and often: - in their recoveries enough to return to work and thus rehum to their: fuli income level. How long should you receive benefits? Upon retrement ot 65, you expect to collect o penslon, Social Sccurity, and draw on your iPh. Yeur best friend works as a consulzant, doesn't report income, and has a small 184: You will most likely buy a disability income insurance policy that covers you You suggest that your friend purchate a policy that provides coverage Your choice and suggestion are based on that fact that disability income insurance provides funds when income is lost due to iliness or injury. If you become cisabled after you retire you lose your pension, Social security, or IRA income. If your frlend becomes disabled, tho smyt IRA is to be sumclent to provide for basic necessities. Additional income be necessary to pay the simpiest expenses. Disatiaty policles include probationary and waiting periods. You plan to take a vacation to go helicopter sking and wal be sure to purchase your disability income insurance policy before the trip. You should also make ture to take your vacation the poticy's period expires because if you get hurt during that time, you will You've had a disability income insurance policy for many years, You have an emergency savings account that would support you for three monthe. if you lose income due to injury or illness, you plan to use theis funds untit the 90 -day period expires, after which you begin recelyng benefits from your disability income insurance policy. Probationary and waiting periods are simits in that they help keep costs down, but they also differ. Genefit payments-both curfent and future -mire prohibited for injurles or ilinesses that occur In the Benefis payments for infurtes or ilinesses that occur ather the period period. This period is usualiy - Benefis payments for infurles or ilinesses that occur ater the made when the Benefit parments-both current and future-are prohibited for infurles or lilnesses that occur in the period: This perlod is usually. - Benefit porments for linjuries or ilinesses that occur after the period made when the period has elopsed. Noncanceliation and walver of premium clauses A friend of yours has a great job thot pays well. Fe plans to work ail his life. His only source of income is his paycheck. He takes trips and enjoys other extras in life. Now that you know that becoming disabled can bring financial ruin, younl strongly recommend that your friend purchase disability income insurance, it is most important that vour friend's policy includes a clause. You explain to your friend that a clause would relieve him of the rosponsiblity of continuing to pay the insurance premiams when collecting berefis, But a. slause means he would always have coverage. If the insurance company canceled his palicy and the became dicabled, he'd lone a lot than he would if he collected benefits and had to continue to pay premiums. The cost of premiums for men and women The cost of premhims for dieability income insurance with the same terms is for a woman thian a man. A woman wat pary anaroximatniv the same oremium as a man her age for coverage with restritions than the man's. The reason is that Double-check your knowledge to belp you select the plan that's right for you by answering the following questlons. You love your job and if you become disabled don't want to do any other job. Yet, youll need an income. Even though it will cost you more, you will buy a policy with a definition of disability of The cost is more because the insurer has less nining if you're eligibi for benefits. When you shopped for a disability income inss f finding a plan that would pay 95% of your gross income was You found that the usual range of gross pay that's covered with disability income insurance is because the percentages could encourage some people to In many cases, these people could then collect than their pay from their jobs. Limiting the amount of disability benefits to these pertentages usually covers necessities adequately and otten Zencourages patients to actively participate 7 In their recoveries enough to return to work and thus return to their full income level. 1 The rar xury unilety Deovise the Hem fong shende you recelve benefita? ar or infurn ti fod Vedicthe imall tha is men nolianns Deveriz hiat